A rise in tax receipts contributed to the lowest government borrowing since 2007, handing the chancellor Philip Hammond a boost before next month“s budget 11.12am BST Laith Khalaf, senior analyst at Hargreaves Lansdown, shares the view that Hammond is unlikely to be handing out early Christmas gifts in next month“s budget.The deficit is heading in the right direction, helped by increasing revenues from income tax, national insurance and VAT, which underlines how reliant government finances are on UK consumers both earning money, and spending it.Despite the improving fiscal outlook, we can“t expect too many giveaways in the forthcoming budget. While the deficit is falling, the government still owes an eye-watering amount of money. 10.56am BST Lower than expected government borrowing in September and the year to date suggests Philip Hammond is on track to meet his target of £58.3bn for the year ending March 2018.However, Paul Hollingsworth at Capital Economics says the chancellor is unlikely to have room for big giveaways when he delivers the budget on 22 November.It is too soon for the chancellor to begin loosening the purse strings in response. After all, the OBR [Office for Budget Responsibility] expected the deterioration in the public finances to be back-loaded this year, reflecting the unwinding of a number of temporary factors. Moreover, it looks set to revise down its assumptions about productivity and the economy“s potential to grow in its November forecasts, which is likely to significantly reduce the room the chancellor left himself against his fiscal targets. As a result, this is likely to constrain the chancellor“s ability to provide big giveaways in the very near term.UK public finances going through a sunny spell. Lowest financial YTD borrowing since 2007 (£32.5bn). On track for lower than OBR forecast. pic.twitter.com/iUVkg7H9f5 10.12am BST The Treasury is keen to show it is not complacent about the deficit, despite the lowest September borrowing f ...
|
